Summary
This filing is an amendment to the iShares Gold Trust (IAU) 2007 annual report, primarily adding details on U.S. federal income tax consequences and filing executed agreements. The Trust's objective is to provide investors with a cost-effective way to gain exposure to the price of gold, backed by physical gold held by a custodian. The net assets of the Trust grew significantly from $907.7 million in 2006 to $1.48 billion in 2007, with outstanding shares increasing proportionally. The Trust is passively managed and does not aim to profit from gold price fluctuations but rather to reflect the underlying gold's value, less expenses. Investors should be aware that while iShares are designed to track the price of gold, they may trade at a premium or discount to their Net Asset Value (NAV) due to market supply and demand, and differing trading hours between gold markets and the AMEX. The value of iShares is directly tied to the price of gold, which can be volatile. Furthermore, ongoing trust expenses, primarily the sponsor's fee, are paid by selling gold, which gradually reduces the amount of gold backing each iShare. This dilution necessitates gold price appreciation to maintain or increase the iShare's value.
Key Highlights
- 1The iShares Gold Trust (IAU) aims to reflect the price of physical gold held by the trust, less expenses.
- 2Net assets grew from $907.7 million (2006) to $1.48 billion (2007), with outstanding shares increasing from 14.4 million to 17.95 million.
- 3The Trust is passively managed, meaning it does not actively trade gold or use hedging strategies.
- 4iShares trade on the AMEX (IAU) and can trade at a premium or discount to their Net Asset Value (NAV).
- 5The valuation of gold and the calculation of NAV are based on the COMEX settlement price for the spot month gold futures contract.
- 6A sponsor's fee of 0.40% of the trust's net asset value is paid monthly, funded by the sale of gold, which gradually reduces the gold backing per iShare.
- 7The primary purpose of this filing (10-K/A) is to amend the 2007 annual report to include details on U.S. federal income tax consequences and file key agreements.